I just got my 770 and was trying to do the same thing as you did and got the same error message.

I believe mke2fs did not get installed correctly or was not installed at all when I ran "apt-get install e2fsprogs" the first time.

Anyway, I connected to the internet, and refreshed the catalog list, package whatever. And ran "apt-get install e2fsprogs" again. This time around I could tell it took longer for the e2fsprogs to install. Ran mk32fs again and it worked.